Published at 00:45 (GMT) 27 Aug
BoJ Gov Haruhiko Kuroda says China growth momentum has declined somewhat and may continue to slow. China economy likely to further slow, but still hit 6-7% GDP this year and next year.
Some market analysts have become too pessimistic on Chinese economy. Drop in China imports could Asian economies. Desot not expect China slowdown to affect Japan exports very negatively in coming years.
PBoC easing appropriate to mitigate any negative impact on Chinese economy.
Asked about recent JPY rise - says BoJ does not target policy to FX, FX policy is up to MoF (he was former MoF Top FX diplomat).
On FX, BoJ Kuroda seems to be "choosing" his words very carefully. On 1 hand he acknowledges that China is slowing, but on the other hand, he says some analysts are too pessimistic. So overall, confirming possible downside risks in China economy and stocks.
Also BoJ Kuroda - after his recent controversial comments on USD/JPY level - seems mindful not to comment on FX. Recap: BoJ Kuroda saidi in parliament in reply to opposition Seiji Maehara that based on REER JPY is weak when USD/JPY was at 124.50-60 on June 10. Which triggered 2 yen fall to 122.40-50.
USD/JPY is currently below that level at 119.95-00, as BoJ Kuroda rules out further easing and on concerns over China. USD/JPY bids at 119.50-60 again, offers 120.30-50 from Japan exporters, Asian accounts, real money.
JPY/CNY closed on Wednesday at 5.3617, USD/CNY at 6.4105 - eye PBoC Fixing later. Given pressure on CNY on concerns over outflows - China stocks. Even as PBoC seeks to curb CNY weakness, given the Aug 11 deval. JPY/CNY hit near 10 month highs of 5.3977 on CFXS on Wednesday, highest since 5.4333 seen on Nov 3 2014. Eye break of 5.4000.
Nikkei +1.50% or +275.45pts at 18,652.28 - off highs of 18,810.05 seen earlier - boosted by US stocks rally. Focus on China stocks concerns - could open up, and then still wobbly, to test 8-month lows. Good to watch.
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